Advisory To All States/Genco’s Regarding Participation In CIRP Of NCLT For Taking Over Stressed Thermal Power Assets

Posted On - 8 December, 2023 • By - King Stubb & Kasiva


The Ministry of Power (MoP), through its notification dated 1st November, 2023 issued an advisory to all states and generational companies for taking part in the Corporate Insolvency Resolution Process or CIRP in order to take over the stressed asset of the thermal power plant. The Ministry of Power and Ministry of New and Renewable Energy (MNRE) along with other several Public Sector Undertakings/PSUs have also provided their assistance in the resolution of numerous stressed power assets which are provided under the Insolvency and Bankruptcy Code, 2016.

The participation of add various stakeholders has also produced numerous other results such as:

  • Saving of costs and time
  • Providing competitive prices for end-to-end consumers
  • Addition of capacity to various power assets under stress

A list of total 4 stressed projects have been made ready for takeover which are in Maharashtra, Tamil Nadu, Chhattisgarh, and Madhya Pradesh. Moreover, to continue and further the above endeavours the states have also requested the GENCOs to participate in the process and add to the capacity building of the projects. The participation would also add to the assets which are having strategic and commercial significance and the state-owned projects including GENCOs are also advised to participate thoroughly in the process.

There are various other challenges which are faced by the stressed projects which include lack or inadequacy of capital investments, shortage and disruption of coal supply and other issues and prolonged recovery of amounts under the power purchase agreements. Participation of GENCOs would also lead to proper addressal of such issues along with reducing the turn-around time for conversion of the assets as contributed by the GENCOs and private players in the market.

Various Central Public Sector undertakings such as NTPC Limited, NHPC Limited, SJVN Limited etc., have been involved actively in the resolution of numerous stressed assets under the IBC. The Power Ministry also stated that there are many challenges faced by the projects that need to be resolved through the methods of lending, sale or proceeds under the IBC.


The notification of the Government of India is an instrumental step in resolving the problem of sick assets in the Public Sector Undertakings. Through the process of takeover or sale of assets through the involvement of all states or GENCOs in the CIRP under the Insolvency and Bankruptcy Code, 2016; the states would be able to sort out their financial obligations and transform the sick assets of the organizations into steady cashflow of revenue.